Sterling got a brief boost on Friday as data showed British factories enjoyed their best month in more than four years in November, suggesting manufacturing will give a boost to the sluggish economy going into 2018.

The monthly survey of purchasing managers in the manufacturing sector (PMI) jumped to 58.2 from an upwardly revised 56.6 in October, topping all forecasts in a poll of economists.

The pound had jumped yesterday after a UK newspaper reported that Britain and the European Union had reached agreement on a divorce bill and were close to an agreement over the Northern Ireland border.

However, not all investors are convinced that a deal can be easily reached over the Irish border, which will be the only land link between the EU and Britain after Brexit.

This week’s sterling bounce on reports that the UK has accepted a higher financial divorce settlement with the EU seems based on the false assumption that the way is now clear for the European Council on 14-15 December to authorise moving on to the next phase of the Brexit process.

To get to that next stage (the transitional deal), however, two further agreements are required. One – on citizens’ rights – looks relatively easy. The same cannot be said of the other – on the Irish border.